By Nick Worth
Thirty-six Republican lawmakers, backed by the Goldwater Institute, filed suit against Arizona Governor Jan Brewer last month in Maricopa County Superior Court.
The nine state senators and 27 state representatives, along with three private citizens, are claiming Brewer is in violation of Proposition 108, passed in 1992, which requires a two-thirds majority of legislator approval before levying any new tax increase.
The issue was brought on by Brewer’s push to expand the Obamacare Medicaid program, which was passed by the legislature during a special session called by the governor in June.
Part of the maneuvering surrounding the passage of the bill, according to its critics, is that when Brewer and her allies in favor of the expansion realized they would not be able to get a two-thirds majority in both houses, as is required by Prop. 108, they gave the authority to impose the mandated funding tax to the director of the Arizona Health Care Cost Containment System (AHCCCS).
Since the legislation was then no longer, technically, imposing a tax increase, it passed in both houses by a simple majority, bypassing the requirements of Prop. 108.
According to the Goldwater Institute’s website, this is another key claim of the lawsuit; that the legislation was passed in violation of state separation-of-powers provisions by delegating taxing power to the AHCCCS director, “empowering him to set the amount and decide who will be exempt.”
“It violates the separation-of-powers by virtue of the fact that it moves power to set tax rates to an unelected government official,” said Lucy Caldwell, media contact for the Goldwater Institute. The institute’s lawyers contend the move to avoid Prop. 108’s requirements denied representation to the constituents of the 36 lawmakers “when their senators’ and representatives’ votes were not counted.”
According to Christina Sandefur, an institute lawyer on the case, the nine senators and 27 representatives have the right to sue Brewer because they voted against the measure. Sandefure also said the group makes up more than one-third of both their respective houses, meaning the bill would not have passed.
“This is exactly the sort of scenario that Prop. 108 was designed to prevent,” said Sandefur. “By enacting a tax without the two-thirds majority required by our Constitution, the state has disenfranchised citizens whose representatives opposed the tax. Legislators are beholden to their constituents, but bureaucrats have no such accountability.”
According to the Goldwater Institute, the Obamacare Medicaid expansion marks the first time that the legislature has directly raised taxes since Prop. 108’s passage in 1992, an indication of the constitutional protection’s strength when followed.
The lawsuit is asking Judge Katherine Cooper to block the legislation from going into effect.
The legislation, however, expands AHCCCS coverage to another 300,000 Arizonans who have been uninsured. In 2011, AHCCCS dropped childless adults from coverage as a budgetary cost saving measure.
According to a Provider Assessment Summary dated Aug. 29 and found on the AHCCCS website, hospitals will be paying out an estimated $75.3 million in levies under the legislation, with $122 paid to the state for each patient discharged in fiscal year 2014. In fiscal year 2015, the estimated payment to the state from hospitals rises to $255,725,300 with a payment per patient of $414.
At the same time, those same hospitals will see a rise in coverage payments from those persons previously uninsured who were unable to pay for services in the past.
The Provider Assessment Summary estimated 87 in-state hospitals around the state will be receiving about $184 million in AHCCCS payments for fiscal year 2014, a net gain of just over $108 million after their $75 million in payments.
In fiscal year 2015 those coverage payments are projected to rise to almost $699 million, leaving a net gain of about $423 million after the patient discharge fees are paid.
Brewer’s website outlines some key points that are the driving forces behind the legislation:
* No state expense. The Brewer Medicaid Plan comes at no cost to the general fund
* Upholds the will of voters. Arizonans have twice voted to restore Medicaid. By adding about 57,000 individuals to a Medicaid membership of more than one million, the state can leverage federal support and vastly diminish state expenses.
* Keeps Arizona tax dollars in Arizona. Restoration of Arizona’s Medicaid program will inject nearly $8 billion into the state’s economy over the first four years alone.
* Protects rural and safety-net hospitals. Without action, the very survival of some hospitals is threatened.
The governor’s office did not respond to a request for comment by press time.
Sandefur, however, said the expansion bill could have far-reaching consequences that go beyond Medicaid expansion. “If this bill is not stopped, a dangerous precedent will have been set that extends far beyond Medicaid expansion,” she said. “Blocking implementation of this law is critical to preserving the democratic protections Arizonans have enshrined in their constitution.”